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Rebooting Economy III: All that's wrong with India's environmental governance

Supreme Court judgements have allowed violations of environment laws being condoned through "ex post facto" green clearances, thereby presenting people with a "fait accompli"

twitter-logoPrasanna Mohanty | July 6, 2020 | Updated 20:14 IST
Rebooting Economy III: All that's wrong with India's environmental governance
About the 2002 circular, the Pune bench of the National Green Tribunal (NGT) first held in January 2016, that it "is illegal, void and inoperative"

Amidst the COVID-19 pandemic induced shutdown, few noticed a significant Supreme Court (SC) judgement of April 1, 2020, relating to environmental governance and climate change mitigation.

The case involves a May 14, 2002 circular issued by the Ministry of Environment and Forests (MoEF) allowing "ex post facto" (retrospective) environmental clearances (ECs) to polluting industries. (The MoEF was renamed as Ministry of Environment, Forests and Climate Change or MoEF&CC in short, in 2014.)

The 2002 circular read: "...it has been decided to extend the deadline up to March 2003 so that defaulting units could avail of this last and final opportunity to obtain ex-post-facto environmental clearance. This would apply to all such units, which had commenced construction activities/operations without obtaining prior environmental clearance in violation of the EIA Notification of 27 January 1994."

The MoEF first issued such a circular in 1998, which went unchallenged in court, unlike this one. A large number of polluting industries ignored the circular and continued to operate illegally, polluting air, water and soil.

The 2002 circular extended the time limit for the third time (second in 1999) to seek retrospective green clearances for the last time.

The Environment Impact Assessment (EIA) notification of 1994 mentioned in the circular provides for detailed study of social and environmental impacts of certain projects and is mandatory for green clearances. It was replaced with the EIA of 2006, which is now proposed to be replaced with the EIA of 2020.

Also Read: Rebooting Economy I: Why stock market is booming when COVID-19-hit economy sinks

Retrospective green clearance "unsustainable in law"

About the 2002 circular, the Pune bench of the National Green Tribunal (NGT)  first held in January 2016, that it "is illegal, void and inoperative".

It ordered (i) revocation of environment clearances to the polluting industries in question (ii) immediate closure of all industrial activities without valid EC and (iii) imposed a penalty of Rs 10 lakh each for damaging environment on the industries in question.

The MoEF and the affected industries challenged the NGT order in the SC.

The top court's April 2020 order upheld the NGT's ruling that the circular granting ex post facto environment clearance is "unsustainable in law".

It explained: "The concept of an ex post facto EC is in derogation of the fundamental principles of environmental jurisprudence and an anathema to the EIA notification dated 27 January 1994...The reason why a retrospective EC or an ex post facto clearance is alien to environmental jurisprudence is that before the issue of an EC, the statutory notification warrants a careful application of mind, besides a study into the likely consequences of a proposed activity on the environment."

The NGT had said, "This circular does not show by which provisions, the power is provided in the Environment (Protection) Act, 1986, to allow 'ex-post facto' EC. This circular itself is void ab initio and ought to be struck down."

The NGT had also described it as "illegal, void and inoperative".

In effect, the NGT questioned the very legal basis of the circular and asserted that it "cannot override the provisions of the Environment (Protection) Act of 1986". The Environment (Protection) Act of 1986 is the law that governs environment clearance for which the EIA report is a pre-requisite.

The MoEF later told the apex court that the circular was an "administrative decision", meaning it has no legal basis.

Since this case reflects everything that is wrong with India's environmental governance, including climate change mitigation, it needs to be scrutinised thoroughly.

The case is also relevant for two more reasons.

One, to understand why polluting industries which impose huge social and environmental costs on the economy - pollution of air, water and soil spreading illness and death; forest depletion damaging environment and taking away livelihood of tribals and other communities dependent on forests for survival - continue to flourish. (For more on this, read: Unravelling GDP growth II: Why GDP measures output, not people's well-being.)

Second, how the proposed EIA of 2020 will impact the environmental governance.

Apex court's green signal to retrospective clearances

The apex court declaring "ex post facto" environment clearance illegal is just one part of its order.

Also Read: Rebooting Economy II: What stock market boom means to people and economy

It struck down two other key orders of the NGT: (i) revocation of green clearances and (ii) immediate closure of the polluting industries (three pharmaceutical companies operating in Gujarat).

Why? It said: "The directions of the NGT for the revocation of the ECs and for closure of the units do not accord with the principle of proportionality."

What is the "principle of proportionality"?

The court explained pointing out that (a) these polluting industries had been operating for many years and "have made infrastructural investments and employed significant numbers of workers" (b) these industries had, after all, obtained ECs in 2002 and 2003 (even though retrospective) and (c) that in similar cases of violations of the environmental laws in the past the apex court had not revoked clearances or ordered closure of polluting industries.

The top court relied on Article 142 of the Constitution, which grants it discretionary power to issue any order to do complete justice in a case, for these rulings.

The apex court famously invoked this constitutional provision in November 2019 to decide the Ayodhya case.

This apex court judgement is quite ironic.

While ruling that ex post facto environment clearance is "unsustainable in law" and "in derogation of the fundamental principles of environmental jurisprudence", it used the logic of "principle of proportionality" to overturn it and hand over the polluting industries as a 'fait accompli' - a phrase with environmentalists are quite familiar with - to the people of India.

"Doctrine of proportionality" for clean chits

In presenting this 'fait accompli' the apex court order invoked two previous judgements, one of which is famously known as the Lafarge case of July 2011.

The Lafarge verdict used "doctrine of proportionality" in a way that led to "margin of appreciation" and ended in giving clean chits to the MoEF and other government agencies for their countless transgressions and undermining of all the environmental laws of the land. (The "principle of proportionality" was used in the April 2020 judgement to let the three polluting industries off the hook.)

The Lafarge case is even more instructive and needs to be retold.

The details of the case are from the apex court's order of July 2011 in the Lafarge Umiam Mining Private Limited vs Union of India case.

The tale goes like this.

French company Lafarge set up a cement plant in Bangladesh for which limestone was to be mined from Meghalaya's Khasi hills. The project was given the environment clearance by the MoEF in 2001 on the basis of a (rapid) EIA report which said the proposed mining area (100 ha) was a "wasteland", "covered with rocks" with "low botanical and floral diversity" and "no likelihood of any wildlife presence". (A rapid EIA is a limited exercise conducting environmental impact measurements in a single season.)

Therefore, no forest clearance (FC) under the Forest (Conservation) Act of 1980 and no clearance under the Wildlife (Protection) Act of 1972 were sought.

Mining began and the plant went into production in 2006.

Something very interesting happened later that year.

A senior forest officer, chief conservator of forests Khazan Singh, visited the mining site and wrote to the MoFE that the mining area was actually a "natural and virgin forest" with "thick natural vegetation cover with sizeable number of tall trees".

He said trees had been felled to clear space for mining without forest clearance (FC) under the Forest (Conservation) Act of 1980 and sought necessary remedial action.

Khazan Singh's finding would be confirmed multiple times by a stream of fact-finding teams over the next four years.

Khazan Singh's report also said Lafarge had broken up 21.4 ha (of the 100 ha of mining lease area) and fell a large number of trees. When counted in 2010, a High-Level Committee (HLC) said the clearing involved felling of 9,345 trees, of which 1,200 had already been felled.

Lafarge sought ex post facto forest clearance under the Forest Conservation Act of 1980 and went to the apex court in 2007 to expedite this clearance.

The apex court knew everything in 2007 but mining continued for the next three years as the MoEF presented it as a fait accompli to the court, giving a variety of reasons: this being an operation involving a neighbouring country (Bangladesh), stopping it would damage bilateral relations, harm investment; Lafarge's promise of compensatory foresting, financial and other benefits to the local villagers of Meghalaya from the project.

That the mining continued nonstop was confirmed by a study by North-Easter Hills University (NEHU) in 2010. Its report said the broken up (forest area cleared) and mined area stood at 38.089 ha - up from 21.4 ha that Khazan Singh had reported in 2006.

The apex court took three years to put a stay on mining in 2010. This stay was meant to facilitate ex post facto clearances and work out Lafarge's remedial steps for allowing it to continue mining. One of the proposals negotiated in presence of the apex court was for the MoEF to grant revise ex post facto green clearances to divert not 100 ha, as was the case originally, but 116 ha of forest land to Lafarge mining. (No reason has been mentioned for this largesse.)

In April 2010, the MoEF issued revised EC and FC. There was no mention of clearance under the Wildlife (Protection) Act of 1972.

The apex court upheld these ex post facto clearances and allowed Lafarge to continue mining on July 6, 2011.

In doing so, it granted a clean chit to all involved in the massive fraud.

No questions were asked how "rocky" and "wasteland" with "no likelihood of any wildlife presence" turned out to be actually a "natural and virgin forest" rich in wildlife.

No questions were asked about how all the checks and balances failed: the amended and strengthened EIA of 2006 regime which had replaced the EIA of 1994; public hearings; multiple MoEF experts' committees which examined, assessed and monitored green clearances; multiple central and state agencies regulating air, water, and soil pollution; central and state forest officials and those of the wildlife board who cleared diversion of forests for limestone mining.

With one stroke, the apex court presented the Lafarge mining 'fait accompli'.

While doing so it forwarded an interesting concept, "doctrine of proportionality", which the April 2020 order used to justify its own legalisation of ex post facto environment clearances to three polluting pharmaceuticals.

Note the difference in the wordings with "proportionality".

"Doctrine of Proportionality" that legalises violations of law

While the "principle of proportionality" was used in the April 2020 judgement to let the polluting industries to continue their operations and validate an apparently illegal retrospective green clearance, the Lafarge verdict used the "doctrine of proportionality" to give clean chits to the MoEF and other government agencies for their countless transgressions and undermining of environmental laws.

The Lafarge order was written by the then Chief Justice of India SH Kapadia while speaking for a three-judge bench.

Also Read: Nitin Gadkari calls Environment Ministry guidelines outdated, hindrances to growth

Here is the part on the "doctrine of proportionality" that the April 2020 order quoted (broken up for ease of reading):

"The time has come for us to apply the constitutional "doctrine of proportionality" to the matters concerning environment as a part of the process of judicial review in contradistinction to merit review. It cannot be gainsaid that utilisation of the environment and its natural resources has to be in a way that is consistent with principles of sustainable development and intergenerational equity, but balancing of these equities may entail policy choices.

"In the circumstances, barring exceptions, decisions relating to utilization of natural resources have to be tested on the anvil of the well-recognised principles of judicial review. Have all the relevant factors been taken into account? Have any extraneous factors influenced the decision? Is the decision strictly in accordance with the legislative policy underlying the law (if any) that governs the field? Is the decision consistent with the principles of sustainable development in the sense that has the decision-maker taken into account the said principle and, on the basis of relevant considerations, arrived at a balanced decision?

"Thus, the Court should review the decision-making process to ensure that the decision of MoEF is fair and fully informed, based on the correct principles, and free from any bias or restraint. Once this is ensured, then the doctrine of "margin of appreciation" in favour of the decision-maker would come into play."

Tough to read and understand. In short, all the wrongdoings of the legions of government agencies, including the MoEF, were condoned to allow the Lafarge project.

Pharma companies' illegal operations and damage to environment

Turning back to Gujarat's polluting industries, it needs to be pointed out that the apex court did find the three pharmaceutical companies "operated without valid ECs for several years after the EIA notification of 1994", they "have been operating in an unregulated and in defiance of the law" and that some of the environmental damages they caused "would be irreversible".

Moreover, they did not have the requisite authorisation under the laws governing air, water and hazardous wastes even before the EIA notification of 1994 (operating without legal authorisation).

As for the retrospective environment clearances given in 2002 and 2003, which the court cited to justify its balancing act, these were not even scrutinised to see if due processes had been followed.

The NGT did.

The NGT order revealed that for the public hearing (added to the EIA in 1997) mandated for these industries, the local villagers were not given any EIA report.

It blamed the five government agencies involved in the public hearing: MoEF, Gujarat government, GPCB, and Collectors of Bharuch and Panchmahal - for not making the EIA reports available.

Since the EIA provides details of a project's possible impact on communities and environment, public hearing without it is meaningless and legally invalid.

The NGT order also said: "Public hearing was held in a hotel, in one case and in Gram Vikas Kendra in another case." Such hearings should happen at project sites to enable participation of the local communities.

While the NGT order does not mention when public hearings happened, the order did record the complainants telling that those were held in 2013 (held by the MoEF) - 10 to 11 years after the retrospective ECs were granted and 11 years after the 2002 circular was issued.

The SC dealt with this mandatory provision of public hearing (in EIA) in a bizarre manner.

It relied on the past apex court judgements to dismiss its significance and said: "The Court while deciding the consequence of granting an EC without public hearing did not direct closure..."

As for the environmental damages by the three drugmakers, the apex court noted that the Ankleshwar industrial area in Gujarat where they operated had "critical level of pollution" for years.
 It cited the Comprehensive Environmental Pollution Index (CEPI) reports of the Central Pollution Control Board (CPCB) for 2009-10, 2013 and 2018 to drive home the point. These reports measured pollution of air, water and soil.

How did the court award a fine of Rs 10 crore each to these industries for damaging the environment? It didn't say.

Was there any scientific assessment? Is it commensurate to the damages caused? Were the costs of illness and death that air, water and soil pollution cause taken into consideration? Is Rs 10 crore a deterrent?

No answer was sought, nor provided.

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